Regular income payments to help your client pay their Care fees
The Immediate and Deferred Care Plans are long term insurance products which are designed to pay a regular, tax-free income to your client’s Registered Care Provider to help meet the costs of their care.
The amount payable is agreed at outset and will continue for the rest of their life, no matter how long they live.
Where income is paid directly to a Registered Care Provider, it can be paid tax free. If, for whatever reason, they leave Care, or no longer need to fund their care themselves, the income can be paid directly to them. In this situation, the income would lose its tax-free status. However, it can be re-converted to being tax-free should income be paid to a Registered Provider again at a later date.
The Immediate Care Plan is designed for income to commence immediately, whereas income from the Deferred Care Plan will start between 1 and 5 years in the future.
A known benefit payment to help cover the cost of care in the future
An Immediate or Deferred Care Plan could be suitable for your clients if they:
- Are aged 60 or over, and currently in receipt of care which is expected to be permanent, or will be within 12 months
- Are likely to need to fund the cost of care themselves
- Want a regular known income for the rest of their life to pay towards the cost of care
- Want to limit the risk of either outliving their savings whilst in care, or reducing the amount of legacy they can leave loved ones
- Do not want any investment risk
- Are able to raise the lump-sum to invest (either from savings, tax-free cash from a pension, using equity in their home or as a gift from family or friends)
- Want to be able to reduce inflation risk by choosing an escalation option
- Understand that if they die early in the Plan, they may not get back the full value of their initial investment.
Options to meet your client's needs
A number of options are available under our Immediate and Deferred Care Plans.
These include the ability for income to increase each year to help protect against the impact of inflation, and the ability for a lump sum to be payable if your client dies soon after the Plan is purchased.
Further details of these options are available in our product features section.